par Stefania Spezzati, Oliver Hirt and John O’Donnell
March 19 (Archyde.com) – Discussions over the takeover of Credit Suisse by UBS continue on Sunday, as the world’s largest wealth manager asks the Swiss government for a guarantee of around six billion dollars (5.6 billion euros). ) with a view to buying out his compatriot, said a source familiar with the discussions.
The 167-year-old establishment is the victim in particular of the turbulence caused on the markets by the fall of the American banks Silicon Valley Bank and Signature Bank over the past week, which forced it to call on financing from the Swiss central bank to the tune of of $54 billion.
Swiss regulators are keen to present a solution for Credit Suisse’s future before markets reopen on Monday, but the complexity of the two giants’ merger might prolong talks until Sunday, the source added.
The guarantees claimed by UBS are to be used to cover the cost of the impairment of certain Credit Suisse assets and possible litigation costs, two sources told Archyde.com.
Credit Suisse, UBS and the Swiss Federal Council declined to comment.
These negotiations come as the banking sector has been battered this week on the European and American markets.
Two sources familiar with the matter told Archyde.com that UBS was under increasing pressure from Swiss authorities to consider a takeover of Credit Suisse.
Credit Suisse’s Swiss business might be spun off from the rest of the bank, depending on the terms of the plan, the sources added.
The Financial Times reported, citing sources familiar with the matter, that UBS, Credit Suisse and key regulators involved were rushing to finalize an agreement on the merger of the two Swiss banks.
US authorities were working with their Swiss counterparts to reach an agreement, according to Bloomberg, which also cites sources familiar with the matter.
A source also told Archyde.com that billionaire Warren Buffett had spoken to Biden administration officials regarding the banking sector crisis.
Neither the White House nor the US Treasury wished to comment.
In the UK, a source said Finance Minister Jeremy Hunt and Bank of England Governor Andrew Bailey were in regular contact over the weekend over the future of Credit Suisse.
(With input from Archyde.com bureaus, Written by Lincoln Feast; French version Camille Raynaud)
